Employees of the Coin Center organization, which popularizes cryptocurrencies, claim that the law banning stablecoins in the United States is contrary to the Constitution.
American senators Kirsten Gillibrand and Cynthia Lummis introduced the Lummis-Gillibrand Payment Stablecoins Decree, which would ban all algorithmic stablecoins whose rate is not fully backed by asset reserves.
According to Coin Center employees, this regulation violates the First Amendment to the US Constitution, which protects freedom of speech. The fact is that algorithmic stablecoins, like all other digital assets, are based on program code, including words.
It makes sense to force issuers of products like Terra [TerraUSD's algorithmic stablecoin] to register with the SEC and file required reports with the SEC, but banning a particular business model is unnecessary and stifles innovation.
If any organization can create a product that complies with securities laws, then it should have a chance to enter the market, Coin Center representatives said.
Instead of outlawing algorithmic stablecoins, Coin Center experts propose introducing a two-year moratorium on their release. During this time, parliamentarians will have time to develop measures to regulate the circulation of these digital assets in order to avoid incidents similar to the collapse of the Terra ecosystem, as a result of which TerraUSD (UST) depreciated and people lost about $50 billion.